Arista Networks Q4 2025 Earnings Analysis

Q4 revenue $2.49B, +28.9% YoY, beat est. EPS $0.75, +19% YoY, beat est. Gross margin 63%, Product gross margin 59% (+8 pps YoY), Service margin 82%. Operating margin 42%. FCF $1.23B (49% margin). 2026 guidance: ~25% growth, ~$11.25B revenue. AI center networking goal raised to $3.25B. Customer diversification improving, expecting one or two additional 10% customers in 2026. 800G adoption surpassed 100 cumulative customers. Net margin declined to 38% (-3.1 pps YoY) due to rising memory and silicon costs. Valuation: ~23x EV/Sales, ~58x forward P/E.